News and Media Releases

Shell to supply LNG to power Philippines’ future growth

08/07/2013

While Phase 2 and 3 of the Malampaya Deep Water Gas-to-Power Project is still being completed, Shell is already looking into building a Liquefied Natural Gas (LNG) import terminal near its refinery in Tabangao, Batangas and is currently conducting a technical feasibility study that will look into its viability.

In the recently concluded Euromoney Philippine Investment Forum 2013, Mike Takeda, Shell General Manager for LNG Development, South East Asia and one of the panelists in the Energy and Power discussion, highlighted the benefits of natural gas and the need to diversify the Philippines’ energy mix. “People are realizing the benefits of cleaner-burning natural gas that Malampaya provides, but we have to look forward and acknowledge the fact that Malampaya cannot energize all power plants in the future. We at Shell see LNG as the solution to providing more sustainable energy for the Philippines.”

LNG will be a cleaner and safer energy resource for the country, as it is natural gas in liquid form that is clear, colorless, odorless, non-corrosive, and non-toxic. LNG is produced when natural gas is cooled to negative 160 degrees Celsius, through a process known as liquefaction. Turning gas to liquid will shrink the volume of the gas 600 times, making it easier and safer to store and transport to markets around the world via ships. When LNG reaches its destination, it will be regasified (returning to gaseous state) at LNG receiving terminals and distributed for power generation and industrial and commercial purposes.

Natural gas burned for power generation releases 25% fewer greenhouse gases and pollutants (such as sulfur, carbon and nitrogen) into the atmosphere than burning oil. It is derived from the natural gas fields which largely come from countries such as Algeria, Australia, Brunei, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, and Trinidad & Tobago.

In his keynote introductory address, Jericho Petilla, Department of Energy (DoE) Secretary, expressed enthusiasm in the Philippines’ economic growth and affirmed the government’s commitment in improving the energy sector’s efforts to sustain this growth. “We have heard how different sectors are embracing the challenge towards progress and behind all these policies and infrastructures that are being improved or are being put in place, there must be a sustainable energy system that will be able to serve the needs of the Philippines not only for today but for the future.”

A sustainable energy system calls for a stable supply of cleaner energy to fuel power plants, infrastructure and efficient transportation. On this note, Takeda shared that the country’s need for energy security is not a challenge for Shell, but an opportunity. “The Philippines’ economy is growing but a stable power supply is very important for foreign companies who plan on investing. As natural gas is abundant, this LNG project will provide a strong opportunity for the Philippines’ growing economy to meet its rising demand for sustainable energy as well as pose a potential to increase foreign investment.”

The Energy Studies Institute’s report showed that the price of LNG today is cheaper compared to marine diesel oil. With its added environmental benefits, it is only logical for South East Asia to be the next hub for LNG infrastructure and technological capacities.

Shell companies in the Philippines and the Department of Energy signed the Memorandum of Agreement for the feasibility study to build an LNG terminal beside Shell Tabangao Refinery last June 2012. Should Shell continue with the project, facility is expected to be completed in 2016. The gas from the LNG import terminal project may used to supply fuel to power plants, industrial users and transport, adding source of power for the Philippines.

The Euromoney Philippine Investment Forum 2013 gathered 500 delegates composed of government officials, local and foreign investors, and top Filipino business leaders and executives.